Microsoft is still undervalued, this investor says

Goodreid Investment Counsel president and CEO Gordon Reid says Microsoft (Microsoft Stock Quote, Chart, News, Analysts, Financials NASDAQ:MSFT) remains undervalued despite investor concerns that its AI position has weakened.

Speaking on BNN Bloomberg’s Market Call on June 15, Reid said concerns about Microsoft’s AI strategy are legitimate, given its close relationship with OpenAI and rising competition from Anthropic and Google’s Gemini.

But Reid said Microsoft’s recent renegotiation of its OpenAI agreement should give the company more flexibility.

“What has happened in the last few weeks is that Microsoft has renegotiated their deal with OpenAI to give them more latitude, to give them more opportunity to explore other avenues,” Reid said. “We think that’s going to open up big things for Microsoft.”

Reid said Azure, Microsoft’s cloud platform, is growing at more than 40% and remains second only to Amazon Web Services.

He also said Microsoft’s broad software footprint gives it a strong base for AI applications.

“The software offerings that Microsoft has, whether it’s through Windows or you name it, is a perfect launching pad for an AI application,” Reid said.

Reid said the stock remains attractive at about 30% below its highs.

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